Danish shipping company's decision highlights way solvent employers will handle pensions in the future

Pensions legal specialists Sacker & Partners claimed a major victory earlier this month when Danish shipping firm Maersk reversed its decision to wind up its final salary pension scheme and pay members only the legally required minimum rather than what they had been promised.

Because the scheme was under-funded, its decision not to pay full benefits could have left younger members receiving only around half of what they had been promised.

Maersk, the UK subsidiary of Danish group AP Moller Maersk, began closing the Sea-Land Services scheme, which came to the group as part of an acquisition, in 2002.

The decision caused outrage because - unlike many firms forced to wind up such schemes - Maersk is robustly profitable.

Maersk said it made the U-turn, which will cost the company 5 million, voluntarily to 'take account of the spirit and intention of the proposed new measures' and because it was 'the right thing to do'.

The government has since decided to require such companies to pay the full cost of winding up final salary schemesm but only from 11 June 2003 - the move is not retrospective.

Sacker & Partners' partner Katherine Dandy says: 'What was surprising about Maersk was that it was a very solvent company.

What's even more disturbing was that it was a legal thing for them to do.

'We acted pro bono for the scheme members and took the case to the Occupational Pensions Regulatory Authority.

OPRA made an order that an independent trustee should go on their board of trustees.'

This was to ensure the trustees had fulfilled OPRA's requirement for them to have 'the necessary knowledge and skill required for the proper administration of the scheme'.

She says the climb-down by Maersk was a big result - the first time a solvent employer has performed such a U-turn.

She adds that the government's move 'drew a line in the sand and said that this was not right thing to do.

Since 11 June, no one can do a Maersk again'.